It has long been acknowledged that efficient distribution systems are essential to companies operating in environments where transactions occur between remote parties. An early and yet still common example of such a remote transaction is that which occurs between customers and department stores via the placement of a telephone catalog order. The convenience and seamless operation of such a retail system relies not only on the consumer's ability to place the order, but on the retailer's ability to place the goods in the hands of the consumer. Distribution systems have performed this function for many decades, albeit with various levels of success. For instance, larger, old economy companies may operate their own distribution systems which are effective in handling bulk orders but not geared to less frequent, smaller shipments. On the other end of the spectrum, smaller companies with fewer orders, such as Internet retailers (or e-retailers), may depend on third party distribution systems because they do not have expertise in distribution. Nevertheless, regardless of the size of the company, or the quantity of goods ordered and shipped to a consumer, one common denominator in implementing an efficient and profitable remote transaction business is the effectiveness of getting orders from a warehouse to the consumer.
Over the past five years the Internet has caused a meteoric rise in remote transactions. Today, given an Internet connection consumers can order virtually any product or service from anywhere around the world. Because the Internet offers retailers the ability to create an electronic store from which to advertise goods, the barriers for entry are minimal, resulting in an enormous Internet presence for small and medium-sized companies. The advantage of an Internet presence for the small or medium sized company is that the company is accessible by vast amounts of consumers and is just as easily accessible to consumers as a conventional brick and mortar store selling goods through an Internet presence. The Internet thus provides companies of every size the means of presenting and selling products to users. However, any company, large or small, must establish a means to ship their products to the online consumer. Although placing a product in the hands of consumers is a problem for both conventional walk-in stores and e-retailers, and the logistical issues associated with the movement of goods from warehouses to consumers exist in virtually any environment in which goods are shipped from a remote location to a customer, logistics problems are particularly pervasive in the e-commerce realm due to e-retailers' lack of experience with the Internet business model and the high volume of consumers that purchase items online.
To remain competitive, small and medium size companies must make deliveries on time and in an efficient manner while minimizing costs. Currently, this logistical hurdle is one of the greatest barriers to the success of a small or medium size company. In the realm of Internet e-retailers, deliveries often aren't made on a timely scale, due to the fact that a companies' shipping infrastructure is unable to ship items that customers have ordered via an Internet web site. A number of entities have begun to provide shipping and other back-end services (e.g., credit card processing) to e-retailers so that the e-retailers can focus on the front end of their systems. By outsourcing distribution, companies are relieved of overhead costs associated with in-house distribution, such as staffing, warehouse facility maintenance, and distribution costs.
There are many third-party logistics providers that provide retailers with third party distribution solutions. The majority of these provide shipping from one warehouse that the third-party logistics provider has established for such purpose. The third-party logistics provider then ships the e-retailers' products to consumers from this warehouse via a carrier associated with the third-part logistics provider. The warehouse distribution provider incorporates its own efficiency standards to reduce handling time of items, minimize costs associated with shipping an item, reduce the likelihood that items will be lost or stolen, and similar warehouse logistics concerns. However, the warehouse often has minimum control over the costs associated with shipping the item via the carrier.
What is needed is a system that provides companies with warehousing and order-fulfillment. More specifically, end-to-end supply chain management services for the quick and cost-effective launch of e-businesses is desirable. Such a system would be beneficial to not only small to midsize Internet start-ups, but also to old-school bricks-and-mortar businesses getting serious about Internet distribution. It would be advantageous if such a system could ship products to 90 percent of the country in two days, from one of a plurality of warehouses located near the consumer, thus reducing carrier costs. The system would select the shipping warehouse based upon the location of the consumer and the ability of the warehouse to fulfill the order.